ROME—Italian Prime Minister Matteo Renzi unveiled plans to make €10 billion ($13.9 billion) in cuts to payroll taxes and a further €2.4 billion in business-tax cuts, his first effort to deliver on promises to overhaul Italy's sclerotic economy.

Mr. Renzi also pledged on Wednesday to pay €68 billion in overdue bills by the state by the summer, a move that has helped lift the economy in other Southern European countries such as Spain....